Loren Kaye – Fox&Houndshttp://www.foxandhoundsdaily.com
Keeping tabs on California Business & PoliticsThu, 24 May 2018 14:03:27 +0000en-UShourly1The Split Roll Property Tax May be on Ice, but Make Way for the Split Roll Sales Tax.http://www.foxandhoundsdaily.com/2018/05/split-roll-property-tax-may-ice-make-way-split-roll-sales-tax/
http://www.foxandhoundsdaily.com/2018/05/split-roll-property-tax-may-ice-make-way-split-roll-sales-tax/#respondMon, 14 May 2018 13:02:05 +0000http://www.foxandhoundsdaily.com/?p=25874Senator Bob Hertzberg last week unveiled a long-promised “modernization” of the state sales tax, but it’s mostly just an old-fashioned tax shift from shoppers to businesses.

The guts of the plan are simple: over a three-year transition period, cut the existing state sales tax rate by two percentage points (from 4.75% to 2.75%) and enact a new three percent sales tax on services purchased by businesses.

The sales tax today only applies to “tangible property,” things you can touch, except food and medicine. For the most part services, such as those provided by custodians, entertainers, consultants and data processors, are not taxed.

The new proposal would finger a wide range of new activities never before subject to an excise tax – but only if purchased by businesses. Attorneys, accountants, advertisers, agents, auditors, actuaries, asset managers – and those are only the “As.”

To his credit, the Senator has designed the tax trade-off to be mostly revenue neutral for the first three years. After that, it’s likely the proposal will generate increasingly more revenues than the old system, since sales of services have generally grown faster than sales of tangible goods.

This is exactly what advocates mean by “modernization:” adopting tax bases that grow rapidly in place of tax bases that plod. The bottom line will be more revenues to state coffers, but the consequence to California’s business environment is troublesome.

The proposal will create winners and losers based solely on how they can manage their consumption of business service contracts. In this case, large businesses that can self-provide legal, accounting, IT, and housekeeping expenses will have a distinct advantage over small businesses that must outsource these services.

Likewise, the many thousands of small businesses that provide business services to other firms will find their costs immediately increased by three percent, and suffer the inevitable loss of customers.

To be sure, a few states do levy a sales tax on some business services. But many others, like Michigan and Florida, have repealed their short-lived efforts. Most states do not tax these services because the tax causes major economic distortions. The main distortion is from “pyramiding,” whereby a tax is imposed at multiple levels in the production of a final product, whereby the effective tax rate exceeds the actual retail sales tax rate.

After property taxes, sales taxes on business inputs are the largest category of taxes paid by business in California, amounting to nearly $20 billion in 2016. A study by the Council of State Taxation found that California business paid about 45 percent of state and local sales taxes.

Finally, this measure does not attack the main culprit of California tax risk and inequity – the supercharged top marginal income tax rates. (This is not a criticism, since those rates cannot be changed by the Legislature until 2031, at the soonest.)

If business is already paying a large portion of the sales tax, if the new tax causes distortionary economic effects, if it creates new losers among small businesses, and if there’s no call for new revenues, then why launch this new tax scheme against California’s business?

The initiative has nothing to do with the situation in the headlines. The ballot measure would not have prevented it and doesn’t even contemplate the scenario. The simple fact is that the data was never sold, so the connection to the proposed initiative is simply specious.

To be sure, tech users have legitimate concerns about privacy, and technology and government leaders are responding by examining a range of consumer protection options. But the ballot measure goes way too far and does more harm than good.

The internet is a seamless and global network. That’s the point. Yet ballot measure proponents seek to create a California-only regulatory scheme. It makes no sense, and is even a little creepy, to attempt to wall off the California internet for custom rules and treatment.

The details of the initiative are a mess.

To comply with this initiative, businesses that provide services in California and meet certain broad criteria would be required to prominently post a link on their websites in California stating, “Do Not Sell My Personal Information.” This must then link to a stand-alone webpage where consumers can opt-out of any sharing or selling of their personal information by the business to any third party.

This may seem convenient, but in practice it will cut consumers off from services that we today take for granted. For example, airlines wouldn’t be able to offer custom deals for rental cars when we make flight reservations. “Free” apps that depend on your location information, like traffic mapping, would simply not be available in California since their business model would be upended.

Because tech businesses would be prohibited from denying or reducing services, or charging more for a service based on whether the user permitted data sharing, many internet services we have come to depend on simply may be unavailable in California.

Even though the measure is being financed by a single individual without a business background in technology, the real beneficiaries will be trial lawyers.

The initiative would allow attorneys and consumers to sue businesses for security breaches of consumers’ data or for other violations of the measure even if consumers cannot prove they have suffered any loss or been injured in any other way. Importantly, the initiative would reverse a 2004 law enacted by the voters requiring that plaintiffs must suffer an actual injury before suing under the unfair competition law. Under this Initiative, any violations are deemed to have injured the plaintiff, which eliminates the biggest hurdle from suing under this law.

As if the legal liabilities aren’t onerous enough, the compliance costs to businesses may discourage them from serving the California market.

The ballot measure creates a labor-intensive paperwork nightmare. It requires businesses to provide notice and disclosure to any consumer who requests it within 45 days – requiring an army of compliance personnel to execute those tasks. Businesses would have to provide categories of personal information collected on the consumer, and sold or shared, along with the identity of the third parties with whom it is shared. Businesses must also provide up-front notice if it sells or shares personal information and how the consumer can opt out.

What proponents don’t mention is that companies can keep all the data that is collected, even if it cannot be used for marketing or consumer services.

Consumers’ internet privacy issues aren’t going away – especially given the reverberating power of social media on this issue. The most sensible approach should provide the right balance between legitimate protection of privacy and availability of internet services demanded by consumers. These issues can best be reconciled by the public’s representatives in Congress, not at the whim of an initiative entrepreneur.

]]>http://www.foxandhoundsdaily.com/2018/04/privacy-initiative-wont-stem-internet-abuses/feed/0Federal Tax Reform Means More Business Taxes for Californiahttp://www.foxandhoundsdaily.com/2018/03/federal-tax-reform-means-business-taxes-california/
http://www.foxandhoundsdaily.com/2018/03/federal-tax-reform-means-business-taxes-california/#respondMon, 12 Mar 2018 13:03:55 +0000http://www.foxandhoundsdaily.com/?p=25290California’s corporate tax base may increase by up to 12 percent as a result of federal tax reform legislation, according to a study recently released by the State Tax Research Center. This means that revenues from California’s corporate income tax could increase by as much as $1.3 billion – without any action by state lawmakers to increase corporate tax rates or income definitions.

Larger tax revenues will result from the new tax reform law, which limited deductions and changed foreign-tax rules. The federal tax law imposed new restrictions on companies’ ability to deduct interest payments, exchange property without paying capital-gains taxes, deduct some fringe benefits and immediately write off future research costs. At the federal level, those changes were far outweighed by the rate cut.

According to Karl Frieden, vice president and general counsel at the Council on State Taxation, the study’s sponsor, “The state tax increase for corporations is totally inadvertent.”

The windfall from federal tax reform will likely produce even more revenue than would a recently-proposed constitutional amendment to impose a 10 percent surcharge on corporate net incomes of more than $1 million.

The avowed purpose of that measure is “to share with ordinary California taxpayers the economic gains provided by federal income tax cuts for corporations with over one million dollars ($1,000,000) in net income.”

It turns out that federal tax reform will accomplish that goal without the Legislature casting a vote.

“The Impact of Federal Tax Reform on State Corporate Income Taxes” was prepared for STRI by Ernst & Young. STRI is the 501(c)3 research affiliate of Council on State Taxation, a nonprofit trade association of multistate corporations.

]]>http://www.foxandhoundsdaily.com/2018/03/federal-tax-reform-means-business-taxes-california/feed/0Seven initiatives to watch that threaten California prosperityhttp://www.foxandhoundsdaily.com/2018/02/seven-initiatives-watch-threaten-california-prosperity/
http://www.foxandhoundsdaily.com/2018/02/seven-initiatives-watch-threaten-california-prosperity/#respondTue, 27 Feb 2018 14:03:30 +0000http://www.foxandhoundsdaily.com/?p=25170Voters may face as many seven ballot measures damaging to California’s business and political climate in November. Any one of these measures should motivate millions in opposition spending by affected industries. More than a few are likely to qualify for the ballot.

Conventional wisdom teaches that gubernatorial elections deliver older and more conservative voters to the polls, which normally drives liberal and anti-business initiative entrepreneurs to aim their measures for presidential election years, like 2016 or 2020. But this formerly reliable rule has crumbled in the face of a low qualification threshold, interest group imperatives, and impatient wealthy donors. It’s open season on the deep pockets!

Increase taxes

In 2016, California voters extended top income tax rates (already the highest in the nation) through 2030, increased tobacco taxes by $2-a-pack, and imposed new taxes on marijuana use and production. Elsewhere, voters in hundreds of local jurisdictions raised sales, property and excise taxes for a variety of municipal or school services.

For certain unions and special interest groups, this isn’t enough. Two proposed ballot measures would impose multi-billion-dollar tax increases on businesses and upper income earners.

The United Healthcare Workers union has proposed a one-percent income tax surcharge on all income over $1 million, which would raise up to $2.5 billion annually for various health care programs. Wealthy taxpayers would pay a top rate of 14.3%, well above the highest income tax rate of any other state.

A coalition of liberal interest groups is circulating a split roll property tax proposal, requiring that nearly all commercial and industrial properties, except production agriculture, be assessed to full market value, and then reassessed every three years thereafter. Tax bills for business would increase by $10.5 billion a year.

Worsen housing crisis

California’s notorious housing shortage contributes to many social ills, including poverty, long commutes, air pollution, and flight of middle class jobs and job seekers. Tenant advocates, backed by the head of the Los Angeles AIDS Healthcare Foundation, are circulating a proposal that would exacerbate this shortage by repealing long-standing limitations on rent control. Far from alleviating the housing shortage, this proposal would simply allow local politicians to benefit some existing renters at the expense of future renters and homeowners.

Regulate industries

A measure purporting to improve consumer control over personal internet privacy promises to be among the hardest fought and most expensive ballot battles. A San Francisco investor proposes requiring businesses to provide to consumers upon request a copy of any personal information it has accumulated and allows consumers to opt-out any or all collection of their personal information – even if not personally identifiable. This measure undermines widespread business models in the industry and likely reduce many services now available to internet users.

United Healthcare Workers is also soliciting signatures for a measure to establish price controls for privately-operated kidney dialysis treatment. Intended to create leverage on dialysis clinics to increase unionized staff, passage of the measure would increase overall costs by shifting dialysis treatments from clinics to more expensive venues like emergency rooms or hospitals.

Stall economic development

For more than two decades, excise taxes on California gasoline and diesel remained flat, contributing to the erosion of purchasing power of those tax revenues and creating a backlog of maintenance and operational improvements for roads and highways. In 2017, the Legislature and Governor agreed on a $5 billion annual boost in transportation revenues to repair roads and bridges and add capacity in some of the most congested corridors.

A San Diego politician has proposed repealing the excise tax increases and subject future increases to statewide voter approval, which would freeze in place hundreds of planned transportation improvements throughout California, without a plausible replacement revenue stream.

Disrupt state governance

A Silicon Valley millionaire is again attempting to qualify a measure to break apart California, this time into three separate states, centered on the Bay Area, Greater Los Angeles and San Diego/Orange County, with the rural area divided among the new states. The new states would obviously create new and unpredictable winners and losers – economically, socially and politically. Rather than working to knit the fabric of our state more tightly together, this proposal would tear it apart.

Initiative proponents will begin submitting petitions to counties in May for signature verification. It is not too soon to begin educating affected business and industry leaders about the consequences of these proposals.

]]>http://www.foxandhoundsdaily.com/2018/02/seven-initiatives-watch-threaten-california-prosperity/feed/0Achieving Economic Growth and Upward Moblityhttp://www.foxandhoundsdaily.com/2018/02/achieving-economic-growth-upward-moblity/
http://www.foxandhoundsdaily.com/2018/02/achieving-economic-growth-upward-moblity/#respondFri, 16 Feb 2018 14:03:44 +0000http://www.foxandhoundsdaily.com/?p=251092018 is a transition year in California politics and public policy.

Voters will elect a new Governor, replace at least seven constitutional officers and seat at least ten new members of the Legislature. Practicing direct democracy, voters will decide in November on as many as 20 ballot measures influencing the political and economic climate.

But no matter how the election battles play out, state officials face persistent economic development challenges in 2018 and beyond: how to encourage upward mobility for California residents and address differential economic success regionally and socioeconomically.

The economy is growing, the state budget is balanced and drought anxieties are on hold. Yet California voters worry that state leaders are not addressing the issues that truly concern them.

Parents are uneasy about their kids’ futures. According to the CalChamber poll, of the 28% of voters with children living at home, three out of five agree that their children will have a better future if they leave California. Reasons include the high cost of living here, high taxes and worry about landing a good job.

The economic prosperity in the Bay Area and coastal Southern California has not yet lifted rural and inland California. The great success experienced by well-educated Californians is less apparent to high school dropouts and low wage employees in service jobs.

Unemployment in coastal and metropolitan California is 3.6%, which if a separate state would rank a18th in the nation. But for the rest of California, unemployment is above 7%. If they were a separate state, inland and rural California would be the 21st most populous– with the second-highest unemployment rate in the nation.

Looking at upward mobility, children born to low-income parents in California have slightly higher lifetime earnings than children born to low-income parents in other states – but not because they live in California. In fact, these same children would have experienced even greater upward income mobility had they grown up outside of California.

Key factors that dampen upward income mobility for low income Californians include the quality of a child’s education, the strength of social networks, exposure to violent crime, and smaller share of two-parent and middle income households.

How can California leaders help spread our rising economic prosperity to those left behind?

First, do no more harm. California has among the nation’s highest taxes and most ambitious and stringent laws governing the workplace. Employers and employees alike pay a price to live and work in California. For those who have made the choice, we should not add to their burdens, and should look for opportunities to reduce them.

California’s litigation environment is daunting. The Private Attorney General Act allows an employee to file class action-like lawsuit over labor code violations, without needing to show any harm (like lost wages), nor show any intent by the employer. The Legislature should repeal this law and revisit other mandates that discourage employers from hiring new workers.

Second, allow private developers to build more market rate housing. Last year lawmakers enacted more housing subsidies, but this will affect only a sliver of the shortage. Most lower-middle income families obtain housing as it filters from occupants who buy or rent better or more expensive residences.

To meaningfully take on the housing shortage, the Legislature must tackle local NIMBYism, coupled with reforming CEQA to remove the cloud of litigation over housing projects large and small, stopping the death-by-a-thousand-fees attitude by state and local leaders, and rolling back anti-commuter policies that distort housing costs in more affordable regions of California.

Third, maintain and expand our economic development infrastructure. California practically invented the modern transportation system and the 20thcentury water delivery complex. Without these historic construction milestones, California would be Albania – a pretty coastline with an underperforming economy. The Governor and Legislature took an important step to add new revenues for long-term maintenance and operational shortfalls in our roads, bridges and highways. This should be only a first step; the next Legislature and Administration should consider whether and how to incorporate a user fee based on mileage to modernize California transportation finance.

Fourth, restore affordability in energy development. California energy policy is climate change policy. Energy costs are higher in California because the state has historically placed a high premium on reducing air pollutants and greenhouse gas (GHG) emissions that cause climate change.

While this will not change soon, leaders should remember that these policies drive up utility bills. The only way to moderate costs while reaching climate goals is to maintain the integrity of the cap-and-trade program while rejecting new command-and-control GHG regulations, like further mandates for renewable power generation, banning internal combustion autos, or limitations on driving. These regulatory mandates are far more expensive than cap-and-trade.

Finally, education is the most effective tool to improve economic mobility in California. Besides the weather, California’s greatest competitive advantage is our skilled workforce. The Legislature should continue improving state support for universities and colleges to restore our qualitative advantage, and continue investment in high school work-based learning initiatives, which allow students to apply their classroom learning in a professional setting to gain real-world experience and relevance.

California is a wealthy state with great natural and intellectual resources. It is within the power of state leaders to foster growth for all regions and demographic groups, and improve the chances for children to once again do better than their parents.

The lead organizations, CalChamber and Linked Learning Alliance, bring together six local employer organizations for the network: the Los Angeles Area Chamber of Commerce, Oxnard Chamber of Commerce, Sacramento Metropolitan Chamber of Commerce Foundation, Greater Riverside Chambers of Commerce, Chico Chamber of Commerce and the Silicon Valley Organization.

This network, unique in California, is supported by a $150,000 grant from the James Irvine Foundation, a stalwart supporter of linked learning and career pathway approaches for high school students.

“This network will leverage the power of an employer-led approach to build scalable systems that give students work-based learning experiences that help prepare them for college and careers,” said Loren Kaye, president of the CalChamber-affiliated California Foundation for Commerce and Education. “We’re working to close the skills gap by encouraging employers to act as ‘end customers’ of education and workforce partnerships.”

By 2030, California will face a “skills gap” of 1.1 million career-ready college graduates to meet employers’ needs, according to the Public Policy Institute of California (PPIC).

“The Chamber Network is providing an incredible resource to the business community by shining a spotlight on the many ways for business and educators to work together,” said Anne Stanton, President and CEO of Linked Learning Alliance. “The diversity in region and size of the participating chambers offers a range of frameworks and best practices for others to adopt. The Network is sending an important message that businesses can and should get involved with their local schools.”

Examples of work in the partner regions include:

Sacramento Metro Chamber Foundation aims to increase the number of employers offering paid youth internships to Sacramento youth in partnership with local school districts. Since 2017, the Chamber has led employer recruitment for Sacramento Mayor Darrell Steinberg’s citywide youth workforce initiative, Thousand Strong.

Los Angeles Area Chamber plans to broaden the STEM workforce and address the unique workforce needs of the emerging biotech industry. Students enrolled in LAUSD health care pathways will have an opportunity to participate in a continuum of work-based learning activities including industry speakers, classroom mentors, job shadows, work site visits, industry panels, and internships.

Oxnard Chamber will continue the development of its Direct Path to Success, which connects employers to their future workforce and exposes high-school students to careers with local businesses. Interns participate in an Intern Readiness Certification program which prepares them through a series of professional and soft skills training. Once students are “intern-ready” local employers offer students guaranteed interviews for paid or unpaid internships.

Greater Riverside Chambers will partner with Riverside Unified School District to bridge the gap between the K-12 curriculum and the essential skills needed in tomorrow’s workforce by developing a work-based learning management tool that connects local high school students with businesses through internships that provide experience, training, and other workforce development opportunities.

Chico Chamber of Commerce will develop and promote student internships and work-based learning opportunities through Team Chico, a public-private economic development collaborative between the City of Chico, Chico Chamber of Commerce, Downtown Chico Business Association, Alliance for Workforce Development, 3CORE, Chico State University, and Butte College.

Silicon Valley Organization will lead Strive San Jose, a partnership with four local school districts to connect industry and education by scaling employer-driven engagement to increase work-based learning for students, industry engagement for teachers, and curricular alignment between industry and career technical education courses.

CalChamber will partner with the Linked Learning Alliance to convene the network of chambers to share best practices, testimony from experts and field leaders, and disseminate resources and supportive materials through webinars and group communications.

]]>http://www.foxandhoundsdaily.com/2018/02/new-partnership-youth-employment-opportunity-launched/feed/0Court of Appeal Upholds Strict Regulatory Review Mandatehttp://www.foxandhoundsdaily.com/2018/02/court-appeal-upholds-strict-regulatory-review-mandate/
http://www.foxandhoundsdaily.com/2018/02/court-appeal-upholds-strict-regulatory-review-mandate/#respondTue, 06 Feb 2018 14:03:31 +0000http://www.foxandhoundsdaily.com/?p=24988State agencies must take seriously the requirement to conduct a timely, accurate economic analysis of major regulations, according to a recently-released opinion by the 5th District Court of Appeal.

In a unanimous opinion upholding the trial court, the appellate justices found that the final economic impact analysis used in rulemaking must be based on evidence, as must the responses to public comments regarding nonspeculative economic impacts which introduce new evidence into the rulemaking file.

According to the Court, comments by affected businesses are “not mere speculation and in similar contexts, specific testimonial evidence from the public has been readily identified as substantial evidence supporting the need for a response.”

This single sentence hammers home the importance of regulated businesses and industries presenting their comments to regulatory agencies about economic impacts of regulations. Not only must agencies respond to these comments, their responses must be supported by evidence in the record.

The court also ruled that a state agency must address both intrastate and interstate economic competitiveness impacts and concerns: “Nothing in the language of the relevant statutes suggests the economic interests relevant to the Administrative Procedures Act analysis are solely inter-state interests.”

In deciding this case, the appellate court rejected the application of a deferential standard of review to the state agency’s interpretation of its obligations under the Administrative Procedures Act (APA). In effect, the court held that the agency doesn’t get to decide for itself what the Legislature meant by holding the agency accountable.

The APA ruling in this dispute, John R. Lawson Rock & Oil, Inc. and California Trucking Association v. California State Air Resources Board et al, Case No. F074003, centered around the adequacy of the economic analysis conducted by the Air Resources Board (ARB) when it adopted an amendment to a rule regulating diesel truck engines.

The California Trucking Association successfully argued that the analysis was a “rosy scenario without merit,” and that the economic analysis “merely evaluated the Amendments’ ‘benefits,’ and did not include any analysis of the Amendments’ potential ‘adverse economic impact[s]’ on affected businesses.”

The appellate court found that behavior unacceptable.

The court also rejected the agency’s willful ignorance of evidence of additional economic impacts, developed through the APA’s iterative regulatory analysis and review process.

That is, once an agency is made aware of relevant economic information—especially potentially adverse economic impacts—then it must address those impacts in good faith as it completes its final economic analysis.

The requirement that agencies conduct rigorous economic impact analyses was enacted by the Legislature in 2011. Business interests, including the California Chamber of Commerce were key supporters of the legislation and also worked closely with the Department of Finance to develop the rules by which agencies must comply with these requirements.

Ten business organizations filed a friend-of-the-court brief in the case.

]]>http://www.foxandhoundsdaily.com/2018/02/court-appeal-upholds-strict-regulatory-review-mandate/feed/0Housing shortage biggest threat to California’s growthhttp://www.foxandhoundsdaily.com/2017/12/housing-shortage-biggest-threat-californias-growth/
http://www.foxandhoundsdaily.com/2017/12/housing-shortage-biggest-threat-californias-growth/#respondWed, 13 Dec 2017 14:02:24 +0000http://www.foxandhoundsdaily.com/?p=24706The overall California economy is humming along quite nicely, and even though we may be overdue for a turn in the business cycle, there are few indications of the threats to economic growth that usually precede a downturn.

Parts of the Bay Area and Southern California are beyond full employment, which means some California regions are creating more jobs than the labor force can support. This situation points to an inevitable threat to growth, which will be the inability to recruit a skilled labor force for the jobs being created. And the ability to maintain a skilled workforce is hamstrung by California’s housing shortage.

I have excerpted Kleinhenz’ piece generously, below, but I commend to you the essay in its entirety.

With the state at full employment, job growth and general economic gains will largely be constrained by the availability of workers. This is good for workers who might achieve pay increases in the coming months and quarters, but it poses a challenge for firms that want to grow but cannot because they are unable to hire the necessary workers…

For decades, California augmented its home-grown labor force with workers from elsewhere, drawing from both other states and other countries… There were opportunities for aerospace engineers, fruit pickers, and everything in between. In the 1970s and 1980s, California’s labor force grew by an average of 3.1% per year, during which time net migration matched or exceeded California’s internal population gains. But net migration turned negative with the 1990s recession, and in turn, growth in the labor force has slowed to just 0.9% annually since 1991. Significantly, in the last decade and a half, consistent state-to-state migration out of California has been offset only by international migration into the state.

It is no coincidence that slower labor force growth has occurred as the cost of living has soared in California. As recently as the mid-1970s, the median price of a California home was just a few thousand dollars higher than the national median. But since 1990, the California median has consistently exceeded the U.S. median by more than 50%…

Without attempting to sound trite, it all boils down to supply and demand. On the demand side, the much-anticipated arrival of Millennials on the housing scene, coupled with recent job and income growth and low interest rates, are all driving demand for housing, both owner-occupied and rent- al. On the supply side, existing home sales have fallen below expectations, given the strength of the economy, while new single-family and multi-family construction has been relatively weak since the recession.

Demand-side solutions to the problem include easier underwriting standards (though not as slack as in the 2000s), reduced down payments, and special finance programs for would be buyers, along with rent subsidies for qualified households. But in the absence of increased supply, these programs result in more would-be buyers/renters competing for scarce housing. No, the situation must ultimately be addressed by increasing supply, a tall order indeed. But until California does so, in earnest, growth of the statewide economy will be constrained.

]]>http://www.foxandhoundsdaily.com/2017/12/housing-shortage-biggest-threat-californias-growth/feed/0CalChamber poll finds voters open to a middle lanehttp://www.foxandhoundsdaily.com/2017/11/calchamber-poll-finds-voters-open-middle-lane/
http://www.foxandhoundsdaily.com/2017/11/calchamber-poll-finds-voters-open-middle-lane/#respondWed, 08 Nov 2017 14:03:02 +0000http://www.foxandhoundsdaily.com/?p=24561Last week in this space we summarized the findings of the Third Annual CalChamber Poll, which found California voters generally anxious about the future. Voters are very concerned about the cost of living – especially as it might affect the ability of their children to live in California. They cite the cost of housing, taxes and crime as concerns that are not being adequately addressed by the Legislature.

So how will voter attitudes translate to politics? This is speculative, of course, since the poll measured a point-in-time about a year ahead of the general election. But gauging voter priorities is important to understand how candidates can and should present their ambitions to voters in the coming year.

The most striking finding is that a theoretical Republican gubernatorial candidate may be down, but not out.

For example, a week after Donald Trump was elected in 2016, a Democratic candidate had a 12-point advantage over a Republican, 42% to 30%.

This year, surveying the same likely 2018 general election voter, the Democrat led by only three points, 41% to 38%. Since President Trump’s approval ratings have not improved in the past year, the most likely explanation of this movement is dissatisfaction among California voters with the performance of elected Democrats.

This is supported by a finding that majority of voters are concerned that the Legislature (82%) and Governor (63%) “are out of touch with the issues that are most important to people like me.”

To be sure, you can’t beat somebody with nobody. Democratic candidates with long résumés are motivating their voters by hammering on President Trump, and Republican candidates are widely unknown. Nonetheless, voters want the next Governor to try to work with the President to solve California’s problems.

An overwhelming (and bipartisan) majority of voters (71%) agree that “the state Legislature is spending too much time and attention resisting President Trump instead of trying to solve the real-life problems Californians face.” And by a 57% to 16% margin, voters would vote for a gubernatorial candidate “who does not support President Trump, but who would work with the President to get California’s fair share of federal funding.”

In fact, even California voters value an anti-establishment bent.

A majority (54%) of voters agree that, “regardless of your feelings toward Donald Trump, his opposition towards the traditional political establishment is necessary.” While Democrats and Republicans are split on the question, voters who do not affiliate with a party agree with this sentiment by a 58% – 37% margin.

Looking at a hypothetical candidate for the Legislature, statewide voters tagged tougher anti-crime positions, fixing water infrastructure and changing teacher seniority rules as the most important issues. Voters were least impressed with candidates who supported the recent gas tax hike or who support changing the private health care system to create either a “Medicare for All” or single-payer system.

Finally, voters still firmly support (73%) the all-party primary system, where the top two candidates in a primary election, regardless of party, advance to the general election. Regardless of political affiliation, Democrat (82%), Republican (59%) and no affiliation (73%) voters supported the current election system.

The CalChamber poll was conducted online by Penn Schoen Berland (PSB) from October 4 to October 6, 2017 among n=1,000 definite California voters. The margin of error is +/- 3.1% at the 95% confidence level.

The economy is growing, the state budget is balanced and the rains have resumed. Yet California voters are apprehensive about the future. They worry that state leaders are not addressing the issues that truly concern them, according to the third annual CalChamber Poll.

For the first time in three years of polling, slightly more voters say that California is headed down the wrong track (52%) than in the right direction (48%). Their assessment for the nation is even worse: twice as many voters have a negative outlook on the country’s direction than have a positive impression.

Parents are uneasy about their kids’ futures. Of the 28% of voters with children living at home, 61% agree that their children will have a better future if they leave California. Reasons include the high cost of living here, high taxes and worry about landing a good job.

This is the Cal Exit to worry about.

On jobs, where you live determines your perception of reality.

San Francisco Bay Area voters see a strong job creation climate in their region, with nearly a quarter of voters seeing “a lot of new jobs” in the area, and nearly eight in ten seeing “a lot” or “some” new jobs. Elsewhere, the perception is dimmer. Coastal southern Californians see a moderate number of new jobs in their regions, while voters in the Inland Empire and Central Valley are more pessimistic, with only 5% seeing “a lot” of new jobs and less than two in five even seeing “some” new jobs.

When asked about the quality of these new jobs, among voters who respond that “a lot” or “some” new jobs are being created, a majority statewide believe that most of these new jobs “tend to be dead ends that don’t lead to the middle class,” while a minority say the new jobs are “the type that lead to higher pay and middle class living.”

Regional differences also are stark here. Most SF Bay Area voters believe the new jobs will lead to higher pay and the middle class, while – by a two-to-one margin – Inland Empire and Central Valley voters believe most new jobs will be dead end jobs.

Crime is also increasingly on the minds of the public.

Voters overwhelmingly agree that elected officials in Sacramento are not spending enough time on reducing crime (86%) or expanding police powers to limit panhandling, homelessness and public drug use in city parks (66%).

They would be more likely to support legislative candidates who take a tough-on-crime approach, such as expanding the list of violent crimes for which early release is not an option, such as felony domestic violence and child sex trafficking (92%), reinstating DNA collection for certain misdemeanors to help law enforcement solve cases (77%), and revise upward the threshold for serial theft to be a felony (76% support).

While most voters have heard a great deal about making California a “sanctuary state,” by a nearly two-to-one margin they believe elected officials are spending too much time on the issue.

Democratic gubernatorial candidates may face calls to support a “single-payer” health care system, but voters are simply not impressed. Voters strongly support subsidies for people who cannot afford their own health care (75%) and for those who have pre-existing health conditions (81%), but are not ready to embrace government-run health care. Voters overwhelmingly prefer to keep their current health insurance (71%) over switching to a single-payer approach (29%).

Voters feel disconnected from their elected leaders, agreeing that the Legislature (82%) and Governor (63%) are “out of touch with the issues that are important to people like me.”

Issues that voters care about but believe the Legislature is not spending enough time on include crime, job creation, keeping energy prices low and building more highways.

Speaking of transportation, considering alternatives to the gasoline tax, voters prefer a mileage-based user fee (29%) to other choices, such as a tax on carbon emissions (20%), issuing state bonds (19%), raising the state sales tax (9%) or reducing spending on schools, colleges and health care (9%).

Voters were very supportive (61%) of paying for road repairs by replacing the gasoline tax with a mileage fee, in the context of increasing automobile fuel efficiency and the increasing number of vehicles that don’t use gasoline at all.

Voters are far less supportive of other fees and taxes on driving.

Only 37 percent support extension of the cap-and-trade program if it caused a fifty-cent-a-gallon hike in the price of gasoline. A $1.50 price increase drives support down to just 30% of voters.

The news is even worse for advocates of mileage fees to reduce driving. By a three-to-one margin, voters oppose legislative limits on driving, such as new fees, purposely designing roads to be more congested, or not expanding highway capacity at all.

Voters do not support (40%) banning gasoline-powered cars by 2030, although younger voters (67%) and voters in the San Francisco Bay Area (50%) seem intrigued by the idea.

Across the board, California voters (81%) have a very or somewhat favorable view of Proposition 13. This view is consistent, whether voters own their homes (85%) or rent (72%), and whether they are Democrat (75%), Republican (90%) or no party (83%).

The CalChamber poll demonstrates that voter anxiety and disconnection is as present in California as elsewhere in the country, notwithstanding the steadfast dominance of Democrats in political leadership.

The CalChamber poll was conducted online by Penn Schoen Berland (PSB) from October 4 to October 6, 2017 among n=1,000 definite California voters. The margin of error is +/- 3.1% at the 95% confidence level.